BUDAPEST, March 12 (Reuters) - Hungarian fund managers have not seen major capital withdrawals after a recent series of brokerage scandals but these cases and tighter regulation could shake up the market, the head of the country's fund managers association said on Thursday.
"We have not seen redemptions that would have exceeded normal daily trading volumes," said Sandor Vizkeleti, who is also chief executive of Pioneer Fund Management Ltd.
The National Bank of Hungary on Thursday proposed tighter rules on investment services scandals involving three brokerages and hundreds of billions of forints worth of clients' missing money.
Vizkeleti cautioned against a too heavy-handed intervention by authorities in the market.
"It (the scandals) will surely lead to a restructuring of the market ... What I'm most afraid of at the moment is that politics will intervene too severely with regulation."
The National Bank suspended the licence of brokerage Quaestor on Tuesday citing regulatory shortcomings and bonds issued in excess of its permitted limit.
Quaestor was the third Hungarian brokerage to face regulatory action within weeks.
The Economy Ministry said new draft rules would require all investment firms to undergo a comprehensive probe by the supervisor every three years instead of the current five, and that fines would also be raised.
Vizkeleti said more frequent probes were a good idea.
"(But) this should be done in such a way that we don't throw the baby out with the bath water," he said.
He said one idea was that the client stock of investment firms should be registered at the central clearing house.
"That would also make sense, but if it makes services very expensive that could have very serious consequences," he said.
Investment funds in Hungary manage assets worth about 5.5 trillion forints ($20 billion) now, with retail investors accounting for 75-80 percent of this stock.
Vizkeleti said he expected this to grow in the long term, while in the short term there could be some shifts in funds, with some clients taking money out or abroad and others investing their money in investment funds instead of brokerages.
"Relating to investment funds, I cannot feel there would be a crisis of confidence. With regards to securities firms I can," he said. ($1 = 284.8200 forints) (Editing by Hugh Lawson)